NEW YORK (27 Nov 2018) — The financial services industry has been courting millennials fast and furiously, but which brands are winning and which are losing with the fastest growing customer segment for retail banks and credit cards? According to the latest Landor Pulse—an analysis conducted by the global brand consultancy—Chase tops the list of retail banks in 2018 with a brand strength ranking of 57 (out of 100), up from 44 in 2017. Brand strength is defined as a combination of brand relevance and differentiation and is a proven metric to measure the future growth potential of brands. A rank score of 57 means that Chase outperforms 56 percent of all 3,000 brands tracked in the BrandAsset® Valuator study.
Credit card and payment system brands, for the most part, scored higher than retail banks, with online payment brand PayPal the clear leader with a score of 99. Runners up Visa and Venmo, the mobile peer-to-peer payment service owned by PayPal Holdings, Inc., are close behind with a ranking of 85.
Among retail banks, Chase is followed by PNC Bank, Citibank, and online Ally Bank with scores clustering between 35 and 36 on brand strength with millennials. Capital One was #5 on the list with a score of 31. Interestingly, PNC Bank had a brand strength ranking of just 6 last year, while Bank of America was at 40. The 2018 data shows Bank of America at 8 in brand strength with this key target audience, a significant drop.
Most credit card and online payment systems fared better with millennials than retail banks. Rounding out the top brands among millennials are Mastercard at 45 and Apple Pay at 44. Venmo gained the most brand strength; its 2018 score of 86 is up 20 ranks from 65 in 2017. Rankings for the other leaders among credit card and online payment brands compared to 2017 were similar year over year.
Landor Pulse is based on data from the first three quarters of 2018 and full-year 2017 scores from the U.S. BrandAsset® Valuator (BAV). Data was specifically evaluated based on responses from adults aged 18-34. BAV is the world’s largest database of consumer brand perception data, comparing statistics for more than 55 financial services brands in the United States.
“Retail banks are still struggling to capture the millennial audience, a key demographic in terms of size and assets, and the next generation of customers,” notes Louis Sciullo, executive director of financial and professional services at Landor. “Smartphones are the new wallets. Banks and credit card companies need to accelerate their technology transformations to match the behaviors of these younger consumers. With millennials switching their primary bank at a rate of 2.5 times more than baby boomers, the potential to grab new customers is huge.”
Maarten Lagae, director of insights & analytics at Landor, continued: “According to the American Bankers Association, millennials are three times more likely to open a new account on their phone than they are in person. The BAV data shows that more traditional brands such as Chase and Visa can succeed if they are attuned to this audience, their needs and habits.”
To help financial services brands acquire and retain millennial customers, Landor shares five important lessons:
- Adopt a mobile-first mindset. Don’t expect millennials to visit your branch in person. They prefer to manage their finances where they go, work, and interact with others. A performant mobile app is a critical component to connect with them. Other technology investments that can deepen that customer relationship, such as offering live online chat or using advanced data analytics to enhance occasional in-person contact, will pay dividends too.
- Educate and empower. Don’t be fooled by the popular belief that money does not matter to millennials. In fact, research shows that money issues are their biggest concern. As a result, they crave financial information and education, and struggle to find information that is relevant to them in a format they find engaging. Digital budgeting tools, dashboards to track daily spending, realistic plans to pay off debt, help with saving for the future and setting long-term goals are just some examples of what they need.
- Share a higher purpose. Financial services brands have the power to help customers achieve their boldest dreams, yet they seem more comfortable talking about interest rates, tax deferral benefits, and other technical aspects that are simply a means to an end. Brands should boldly speak to millennials’ deeper needs and help them dream. PayPal’s engagement with freelancers in the global gig economy is a good example of finding a higher purpose that is backed by a suite of helpful tools.
- Offer instant gratification. Millennials are becoming less patient—services like Amazon Prime and Netflix have found ways to instantly cater to their needs. Financial services in the United States are clearly trailing behind, with only a few banks offering real-time payments. The rapid rise of Venmo and other digital wallets is no surprise. The need for speed will only increase, and brands that can close the gap between demand and delivery of services and products will win in the future.
- Be transparent. Millennials haven’t forgotten about the global recession, and financial services brands are still faced with skepticism and suspicion. The best way to counter such negative feelings that get in the way of a healthy customer relationship is to be transparent and honest. Tell them how you make your money: exactly what fees will be charged, and explain other aspects of the financial services business model in layman’s terms.
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About the Landor Pulse of Financial Services Brands
Using the BrandAsset® Valuator (BAV) data of 17,000 United States consumers from the first three quarters of 2018, and full year 2017, Landor Pulse analyzed brand strength based on relevance and differentiation among adults aged 18-34. With more than 25 years of consumer data, BAV is the world’s largest and most enduring study of brand perceptions and performance. Its brand strength model—based on the four pillars of differentiation, relevance, esteem, and knowledge—provides unparalleled historic and predictive insights into building, managing, and tracking brand performance.
To date, BAV tracks brands in more than 50 countries with data from more than 1 million consumers. It covers 55,000+ brands across dozens of brand metrics and attitudinal questions. BAV is part of Young & Rubicam Group, a partnership of companies that includes Landor.
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